Dutch financial authority AFM has fined Spanish bank Santander €3.7 million for irresponsible lending practices dating back to 2021.

A probe by the AFM revealed that in half of the 10 cases it investigated, the bank granted loans to Dutch clients which far exceeded their capacity to pay them back.

In 2021, Dutch clients who turned to Santander for loans for a car, home renovation or furniture, generated a turnover of €94 million.

Loans come with conditions which in the five cases cited by the AFM had not been complied with. Banks are not allowed to lend more money than a household can cope with, for example.

“A loan that is too high can cause people to find themselves with too little money to pay for their fixed monthly expenses,” AFM board member Jos Heuvelman said.

One client, a single parent, was given a €10,000 loan when their financial situation would not warrant any loan at all, the AFM found.

In 2019, Santander was fined €1.1 million for the same bad practice. The AFM fine of €3.7 million reflects the bank’s repeated lack of controls, it said.

Santander said it had cooperated with the AFM investigation and has compensated some of the duped clients.